Bank of Canada Holds Interest Rate at 2.25% in January 2026: Employee Rights

Bank of Canada’s Decision

On Jan. 28, 2026, the Bank of Canada (BoC) held its key interest rate at 2.25%.

The Bank Rate remains at 2.5%, while the deposit rate is 2.2%.

“Global financial conditions have remained accommodative overall. Recent weakness in the US dollar has pushed the Canadian dollar above 72 cents, roughly where it had been since the October Monetary Policy Report,” the central bank said in a news release.

“Governing Council judges the current policy rate remains appropriate, conditional on the economy evolving broadly in line with the outlook we published today. However, uncertainty is heightened and we are monitoring risks closely.”

Second Consecutive Hold

The decision comes after the BoC kept its key interest rate at 2.25% on Dec. 10, 2025.

For a complete list of interest rate changes and detailed insights, visit our full rate change list.

Next Rate Announcement

🗓️ The next interest rate announcement from the Bank of Canada is scheduled for March 18, 2026.

Key Announcement Highlights

• Economic growth is projected to be modest in the near term as population growth slows and Canada adjusts to US protectionism. The BoC is currently anticipating a 1.1% increase in 2026 and a gain of 1.5% in 2027.
• US trade restrictions and uncertainty continue to disrupt growth in Canada. After a strong third quarter, GDP growth in the fourth quarter likely stalled.
• The unemployment rate remains elevated at 6.8% and relatively few businesses say they plan to hire more workers.
• CPI inflation picked up in Dec. 2025 to 2.4% — boosted by base-year effects linked to last winter’s GST/HST holiday. Excluding the effect of changes in taxes, inflation has been slowing since Sept. 2025.
• Oil prices have been fluctuating in response to geopolitical events and, going forward, are assumed to be slightly below the levels noted in Oct. 2025.
• The BoC will be keeping a close eye on upcoming negotiations of the Canada-US-Mexico Agreement (CUSMA).

How Does this Affect Employment?

The BoC’s decision to keep interest rates lower is aimed at stimulating business activity and consumer spending, which will hopefully lead to increased hiring.

However, the overall impact on employment will depend on how the broader economy reacts to lower rates, inflation, and US trade uncertainty.

Lost Your Job?

In the event that you’re fired or let go, it’s crucial to understand your employment rights in Canada.

Non-unionized employees can get up to 24 months of severance pay when they lose their job. This includes individuals working full-time, part-time, or hourly in Ontario, Alberta, and British Columbia (BC).

Severance is the compensation Canadians receive from their employer when they’re fired without cause.

• Fired for cause? It’s very likely that you’re still entitled to full severance pay because employees often don’t meet the conditions necessary for this type of dismissal.

Regardless of a company’s grasp on employment law, they’re legally required to provide proper compensation after firing staff.

This concept applies during challenging economic conditions, downsizing, the closure of a business, or major public health events such as the COVID-19 pandemic.

📺 WATCH: 5 Key Facts About Termination “Without Cause”

Contact an Employment Lawyer

If you’ve been fired or let go for any reason, reach out to the experienced employment law team at Samfiru Tumarkin LLP.

We’ve successfully represented tens of thousands of non-unionized workers in Ontario, Alberta, and BC.

In addition to severance package negotiations, our lawyers can assist you on a broad range of employment matters, including:

📞 Contact us or call 1-855-821-5900 to get the advice you need and the compensation you deserve.